Brexit expediting Asian Century

The Brexit that created a hullabaloo in Europe, could be seen a blessing in disguise for emerging economies in Asia, as it accelerates the arrival of an ‘Asian Century’, led by China and India. By 2050, Asia will account for over half the world’s GDP, almost double that of 2011, according to the Asian Development Bank, with three billion newly
affluent citizens.
Both Asian giants and other developing countries feel they are not well represented in current globalisation and institutions, which are reluctant to reform. Hence, they have opted to form new alliances.
“The old system which kept the West rich and safe is under threat,” said Neelam Deo, a former ambassador and director at Gateway House think-tank in Mumbai.
Wealth seems to move towards East. Now China is the world’s second-largest economy, set to overtake the US in around a decade, while India will be the world’s most populous nation by 2022.
In preparation for the Asian Century, the International Monetary Fund (IMF) named the Chinese renminbi a reserve currency — a main world
currency — last November, joining the pound, dollar, euro and yen.
Moreover, Beijing’s flagship ‘One Belt, One Road’ policy seeks to revive the ancient Silk Road trade route with huge investment from central Asia to
Europe.
To consolidate its economic clout, in January China opened the Asian Infrastructure Investment Bank, seen as rivalling the World Bank or the Japan-led Asian Development Bank. AIIB has attracted 57 members, including Britain and Australia — with the notable exclusions of the United States
and Japan.
There is a general sense that Brexit makes China stronger. But the issue is rather complicated. It is believed in the West that destabilization of the West in general seems like more a Moscow goal. Meanwhile, rebalancing power away from the United States in particular is more a Beijing goal.
Indeed, China may profit from a more stable West. China President had expressed his hope that Britain would remain in the European Union. With the exit, China didn’t win but it is a lesser loser than EU. Now fractured, the EU can’t help but pose less of a counterweight to China’s rise on the world stage. Banks and businesses will now look for China as an alternative.
As a former British colony, India which enjoys close economic, trade, political and cultural ties with the United Kingdom, is well-positioned to reap fruits of the Brexit. The massive selloff of the British pound that followed Brexit resulted in a roughly 8% decline of the currency relative to the Indian rupee. This will make less expensive for Indians to travel and study in the UK.
The falling currency also presents cheaper real estate options for Indian citizens and companies seeking property in the UK’s expensive property market. The Brexit will make London seek a stronger trade relationship with
New Delhi.
Even without the Brexit, scenario of emerging economies, especially China and Asia, has been eminent though it is now being speeded up by the ‘Leave’ vote. In terms of burgeoning economies empowered by skilled workforce, the ‘Asia Century’ will move the wealth from West to the East.